Sacramento’s new home market is blossoming this spring, but one new neighborhood struggles to keep up

Just west of Sacramento’s Curtis Park neighborhood, a tightly packed row of new, three-story houses stands shoulder to shoulder like silent sentinels. Their view is of empty lots sprouting spring weeds for blocks and blocks, some with signs pointing to “new homes” that don’t exist.

More than two years since these brownstone-style row houses went up for sale in Crocker Village, an infill development previously called Curtis Park Village, the promise of a dynamic new urban neighborhood has gone unfulfilled.

Just 33 of the planned 331 homes have been built, along with a senior apartment complex, even though Sacramento is in the midst of what real estate analysts say is the best new home sales moment in the region in a decade.

Other infill communities in Sacramento’s central area are faring far better. The Mill at Broadway has sold 126 homes in one year. McKinley Village in East Sacramento reports 75 sales in a little more than a half-year. And home sales hit 50 in less than a year at The Creamery at Alkali Flat in downtown.

There is nothing wrong with the Crocker Village site, a cleaned-up former railyard with attractive neighbors, Sacramento City College and the Curtis Park. It’s close to downtown jobs. Residents can use a nearby light-rail station. Walkable amenities include the popular Track 7 Brewing Company, William Land Park and McClatchy High School.

But a 14-month-old lawsuit filed by the developer against the city has cast a cloud over Crocker Village.

Crocker Village

Few homes have been built or started.

SHARON OKADA sokada@sacbee.com

The owner, Petrovich Development Company, hopes to build a Safeway supermarket and gas station as part of a larger commercial complex at the south end of the project near Sutterville Road. The city rejected the gas station in 2015, contending it’s not compatible with the neighborhood and is not consistent with the city’s policy of discouraging car-oriented businesses near transit stations.

Paul Petrovich is asking a Sacramento Superior Court judge to declare the city action illegal, given that the site’s zoning allows a gas station. He contends the decision was tainted by personal animus toward him. No final court hearing date has been set.

Petrovich declined to speak to The Bee for this story, but in the past he has said the success of the commercial center is a key to developing the overall Crocker Village property. Most of Petrovich’s experience is as a commercial developer, and stores were always a part of his plans. The other three major urban infill developments underway, and several smaller central city housing projects, in contrast, are primarily if not entirely residential.

Several local real estate analysts say the unresolved issue of what will be built in the commercial part of the project creates uncertainty among potential home companies who might be interested in building there, and among potential home buyers wondering what kind of community ultimately will emerge – and how long it will take for that to happen.

“If I’d pick one reason Crocker Village has struggled, it’s the uncertainty about that (commercial site). It’s such a big part of the overall footprint, you really want to know what is going to be there,” said Dean Wehrli, a senior vice president at John Burns Real Estate Consulting, which does market studies for residential developers, investors, and banks.

The uncertainty has left the one housing builder on-site, BlackPine Communities, in a tough position.

BlackPine is not involved in the legal fight but is feeling the effects. “My business is selling homes and lifestyles, and when you break those two apart, you don’t sell homes,” said BlackPine president Mike Paris.

Nevertheless, Paris said he expects to have the row of 45 brownstone-style town homes finished and sold this summer, and said he believes in the long-term viability of the community. “It is going to be a great neighborhood,” he said. “It is just not going to happen at the time we hoped it would.”

Kevin Miller-Coe, a pioneer Crocker Village resident who recently sold his home for reasons unrelated to the controversy, said he and other residents believe the commercial center issue will get sorted out and that a solid neighborhood will rise. But he acknowledged, for now, some potential buyers are not able to “visualize what is not there.”

The fight between the developer and city isn’t the only reason home production has been slow, analysts say. Infill development has hit a new gear in recent weeks in Sacramento, reacting to a growing interest in urban living. But that has meant more competition as well.

Crocker Village is offering higher-end homes, which are slower to sell in the current home market. The average sales price there has been $609,900, according to CoreLogic, a real estate market tracking company. One of the more well-appointed townhomes recently resold for $750,000, and upcoming 3,000-square-foot single family homes will be priced in the $900,000 range.

That puts Crocker Village in competition for some buyers with higher-end homes in McKinley Village in East Sacramento and, to an extent, with BlackPine’s other major current infill community, The Creamery at Alkali Flat.

When McKinley Village opened its doors for sales last fall, it boasted a fully built clubhouse and community swimming pool in the center of the neighborhood, as well as a community park, public art and numerous trees. A variety of housing types were spread out around the development, offering a sense of what kind of community it will be.

That was done on purpose, McKinley Village developer Kevin Carson said. “People want to be part of a community, have a sense of place. You want a ‘there’ there.”

Conversely, at the Petrovich site, even its name causes confusion. Online promotions call the development Crocker Village. But some signs on the property and on home brochures last week were still calling it Curtis Park Village.

Crocker Village, formerly called Curtis Park Village, is shown in this aerial view on Feb. 11 in Sacramento. The development near Sacramento City College remains largely empty two years after construction began there.

Randy Pench rpench@sacbee.com

The Creamery at Alkali Flat also offers a sense of community. It is in an existing downtown neighborhood, a short walk to state jobs and entertainment venues. Though Alkali Flat is not an upscale neighborhood, the city’s central core has gained cachet as a place on the upswing since Golden 1 Center and other new amenities opened. That community is selling well enough that Paris of BlackPine Communities said he stopped sales temporarily to allow construction to catch up, so that people who buy don’t have to wait an extended period to move in.

The Mill at Broadway, the best-selling of the four infill communities, is a notably different project. Its developers built less-expensive housing, some of it priced under $300,000. They targeted younger buyers, many of them first-timers tired of paying Sacramento’s rapidly rising apartment rents.

“Our concern is not being able to build homes fast enough for the demand we’ve seen,” said developer Kevin Smith at The Mill at Broadway.

In contrast, market analyst Wehrli said, older baby boomers who may be considering downsizing by moving to Crocker Village, McKinley Village and The Creamery, as well as families looking for long-term homes, tend to do more shopping around and visit project sites repeatedly to get a feel for them before pulling the trigger.

Other smaller projects have recently entered the infill housing marketplace, ratcheting up competition, some with upper-end prices like Crocker Village.

A group led by Sotiris Kolokotronis and The Grupe Company is building a row of 32 townhomes called 20QPR in midtown Sacramento. The Kings this month began marketing 45 condominiums next to their downtown arena, and another developer plans 78 condominium units facing Capitol Park. Infill housing construction continues as well on the riverfront in West Sacramento.

Competition aside, the Crocker Village developer could soon face another hurdle.

The city entitlements for Crocker Village include a stipulation that the developer make capacity improvements on the Highway 99 southbound offramp at Sutterville Road, adding a second right-turn lane toward Crocker Village and a second left-turn lane toward Oak Park. City officials said the project a few weeks ago was seven housing permits short of hitting the trigger point.

It’s all happening during what is considered an “up” cycle in Sacramento housing. Overall, new home sales are on the rise in the region, topping 500 for the first time in a decade in March, according to the North State Building Industry Association.

“I think people are optimistic in the industry,” BIA spokesman Ioannis Kazanis said. “It has people buzzing a little bit about what they are seeing.”

Will that market lose its momentum before Crocker Village can find its feet?

Gregory Paquin, a real estate analyst at The Gregory Group, is among several housing watchers who say they expect the market to grow for an extended period. “We don’t believe the market is going to flame out this year or next year,” he said. “We have a bit of a run here. There is still time to get on this wave.”